Sanaa: Prime minister-designate Mohammed Basindawa is expected to announce a national unity government within two days, a European diplomat and a Yemeni official said on Sunday.

The government "will be formed within the next couple of days, and if they do it today it is even better," Michele Cervone d'Urso, the EU's first ambassador to Yemen said.

Half of the government must be opposition members while regime loyalists make up the other half, based on a Gulf-brokered and UN-backed power transfer plan which President Ali Abdullah Saleh signed on November 23.

But Yemen's outgoing deputy information minister, Abdo al-Janadi, said he expected the government to be announced on Sunday.

Meanwhile, Vice President Abdrabuh Mansur Hadi formed a military commission in line with the agreement to oversee the restructuring of the security forces, a news agency reported.

The 14-member commission will also tackle the withdrawal of gunmen from the streets in a bid to restore order in the country. Some of the security forces are still controlled by cronies of Saleh.

The opposition warned on Saturday that it will not go ahead with forming a unity government until the military commission is formed and fighting stopped in Taez where 31 people were killed in clashes between the Army and dissident tribesmen.

State media reported later the same day that a ceasefire had come into effect after a call by Hadi for an end to the fighting which broke out on Thursday and for a pullout of troops and militiamen.

Saleh signed the Gulf-brokered deal last month in Riyadh under which his powers were passed on to his deputy, although he remains honorary President until February.